Important Information

You are visiting the international Vantage Markets website, distinct from the website operated by Vantage Global Prime LLP
( www.vantagemarkets.co.uk ) which is regulated by the Financial Conduct Authority ("FCA").

This website is managed by Vantage Markets' international entities, and it's important to emphasise that they are not subject to regulation by the FCA in the UK. Therefore, you must understand that you will not have the FCA’s protection when investing through this website – for example:

  • You will not be guaranteed Negative Balance Protection
  • You will not be protected by FCA’s leverage restrictions
  • You will not have the right to settle disputes via the Financial Ombudsman Service (FOS)
  • You will not be protected by Financial Services Compensation Scheme (FSCS)
  • Any monies deposited will not be afforded the protection required under the FCA Client Assets Sourcebook. The level of protection for your funds will be determined by the regulations of the relevant local regulator.

If you would like to proceed and visit this website, you acknowledge and confirm the following:

  • 1.The website is owned by Vantage Markets' international entities and not by Vantage Global Prime LLP, which is regulated by the FCA.
  • 2.Vantage Global Limited, or any of the Vantage Markets international entities, are neither based in the UK nor licensed by the FCA.
  • 3.You are accessing the website at your own initiative and have not been solicited by Vantage Global Limited in any way.
  • 4.Investing through this website does not grant you the protections provided by the FCA.
  • 5.Should you choose to invest through this website or with any of the international Vantage Markets entities, you will be subject to the rules and regulations of the relevant international regulatory authorities, not the FCA.

Vantage wants to make it clear that we are duly licensed and authorised to offer the services and financial derivative products listed on our website. Individuals accessing this website and registering a trading account do so entirely of their own volition and without prior solicitation.

By confirming your decision to proceed with entering the website, you hereby affirm that this decision was solely initiated by you, and no solicitation has been made by any Vantage entity.

I confirm my intention to proceed and enter this website Please direct me to the website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom

By providing your email and proceeding to create an account on this website, you acknowledge that you will be opening an account with Vantage Global Limited, regulated by the Vanuatu Financial Services Commission (VFSC), and not the UK Financial Conduct Authority (FCA).

    Please tick all to proceed

  • Please tick the checkbox to proceed
  • Please tick the checkbox to proceed
Proceed Please direct me to website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom.

US

×

Watch Reborn a Trader

row

View More
SEARCH
  • All
    Trading
    Platforms
    Academy
    Analysis
    Promotions
    About
  • Search
Keywords
  • Forex Trading
  • Vantage Rewards
  • Spreads
  • facebook
  • instagram
  • twitter
  • linkedin
  • youtube
  • spotify
7 Day Trading Tips in 2022 (Guide)

TABLE OF CONTENTS

7 Day Trading Tips in 2022 (Guide)

7 Day Trading Tips in 2022 (Guide)

Vantage Updated Updated Wed, 2022 August 17 07:54

If you’re just getting started on day trading, here are some key information you may want to consider before embarking on your trading journey.

Key Points

  • Before day trading, conduct thorough research including fundamental analysis, understanding market movers, and choosing the right assets, starting with small investments and only risking what you can afford to lose.
  • Select a trading platform that offers rapid execution, minimal fees, and pick highly liquid assets to ensure quick entry and exit from the market.
  • Always close positions before the end of trading hours, utilise stop-loss orders to manage risks, and maintain emotional discipline to stick to your trading plan.

1. Conduct Sufficient Research

Research is an essential skill for a trader, and there are three key components as follows.

Fundamental Analysis

Understanding market fundamentals is crucial before starting out as a day trader. Knowing what makes the markets move may help generate trade ideas and find opportunities to take advantage of[1].

For example, Federal bank (FED) announcements can impact the market It will be good to look out for an increase in federal interest rates, news on company earnings, mergers, acquisitions, and other news that may affect any assets you are trading.

Technical Analysis

As a day trader, learning how to read charts and using technical analysis could be beneficial to time the entry and exit points of your trade[2].

Depending on your technical strategy, using corresponding technical indicators may help you make better entry and exit decisions. For example, the Relative Strength Index (RSI) serves as an indicator that checks for a stock’s health[3].

Assets to Trade

Before trading any instrument or asset in the securities markets, you may want to consider if you’ve done your due diligence. Understand the ins and outs of each asset, what makes them move, and how you can make better decisions in your trades.

Take CFDs, for example. You may need to gain in-depth understanding of how margin, leverage, and fees work, before exploring the possibility of trading them, to seize opportunities in both rising and falling markets.

2. Have Sufficient Capital

Before getting into any trade, having sufficient capital is important as you do not risk getting a margin call. Here are three considerations for you:

Start Small

There’s no shame in starting small, especially if you’re still new to day trading andl if you have little trading experience. Instead, you may want to consider spreading out your risk by diversifying across at least two or three assets, positions, and time horizons[4].

Trade Only What You Can Afford to Lose

Studies show that 70-90% of day traders lose money when they first start out trading. You may consider limiting your capital to only what you can afford to lose [5].

Fees

Trading on broker platforms will incur fees which include spreads, commissions, and other unique trading fees. If you have access to sufficient capital, you’ll pay these fees and gain quick access to the markets.

3. Choose the Right Platform

As a day trader, picking the right platform is as important as researching well. Find a platform that allows you to make quick decisions, and execute these decisions accurately and instantly with minimal fees.

Since most of your decisions are time-sensitive, you may consider opting for a broker and platform that support quick trade executions. You’ll likely be able to access favourable market prices when entering positions and may be able to secure your earnings from slippage in your exit.

Although fees are inevitable, selecting a broker that charges fair rates gives you an edge on trading cost. High cost may affect your balance.

4. Pick Assets with High Liquidity

When day trading, you buy and sell securities only within the day’s market period. For this reason, you may consider only trading in markets that you can enter or exit as fast as possible. You may also like to opt for liquid markets so that you can dispose of them whenever the need arises[6].

Learn how to identify market trends and seize opportunities from it. Also, checking the trading volume of an asset and track its median volumes before trading it can be a useful practice. Assets with low volatility may leave you with exit orders that fail to execute. Intraday trades that don’t execute within the trading period are delivery trades.

Essentially, a delivery trade is much like a swing trade. Although you’re trading the stock short-term, your position lasts for longer than one day. Day trading and swing trading are two different approaches. Strategies for day trading wouldn’t work for swing trades and vice versa[7].

day trading tips

5. Don’t Leave Open Positions After Trading Hours

As someone that does day trading, you may trade securities within the opening and closing of the markets of each trading day. You may want to consider closing all your open positions on or before the end of the day trading period [8].

Leaving your positions overnight as an intraday trader may expose you to potential risks and losses that may incur after the market closes.

Let’s say you left an open position for ABZ company stock. The company gets involved in an unethical scandal and its stock price plummets overnight. Your failure to exit that position during the end of your trading day could possibly cause you a massive loss.

6. Use Stop-loss Orders

No matter how optimistic you are about the position you’ll take in a trade, it is ideal to always set up a stop-loss order. As a day trader, you must be prepared of the loss you’re potentially willing to accept if your decision goes wrong[9].

Stop-loss order is a risk management tool. It can reduce the loss you can suffer within any given period. If you trade without stop-loss orders, you are likely to be exposed to much bigger losses when trades go wrong, and in some cases, your losses may exceed your invested capital.

7. Manage Your Emotions

Learn how to control your emotions when trading is valuable. Stick to your set targets and avoid getting carried away by the upward trend of signals of the stock you’re following.

Final Thoughts

Knowledge is power. You could consider equipping yourself with solid understanding of the markets and financial instruments before diving into day trading, otherwise it’d be like skydiving without a parachute.

Start Trading with Vantage

Access markets including forex, commodities, indices, shares/stocks and more, at low cost.

Start trading CFD stocks by opening a live account here, or practice trading with virtual currency with a demo account.

You can also sign up for our free, weekly webinars that will break down the current markets as well as discuss potential trade set ups for the week.

References

  1. “What Is Fundamental Analysis?”. Investopedia, 2022, https://www.investopedia.com/terms/f/fundamentalanalysis.asp. Accessed 20 Apr 2022.
  2. “What Is Technical Analysis?”. Investopedia, 2022, https://www.investopedia.com/terms/t/technicalanalysis.asp. Accessed 20 Apr 2022.
  3. “Relative Strength Index (RSI) Definition – Investopedia.” https://www.investopedia.com/terms/r/rsi.asp. Accessed 17 Jun. 2022.
  4. “An Introduction To Day Trading”. Investopedia, 2022, https://www.investopedia.com/articles/trading/05/011705.asp. Accessed 20 Apr 2022.
  5. GmbH, finanzen.net. “If You’re Day Trading, You Will Probably Lose Money: Here’s Why”. Markets.Businessinsider.Com, 2022, https://markets.businessinsider.com/news/stocks/if-you-re-day-trading-you-will-probably-lose-money-here-s-why-1030667770. Accessed 20 Apr 2022.
  6. “10 Day Trading Strategies For Beginners”. Investopedia, 2022, https://www.investopedia.com/articles/trading/06/daytradingretail.asp. Accessed 20 Apr 2022.
  7. “How To Start Delivery Trading? | IIFL Knowledge Center”. Indiainfoline.Com, 2022, https://www.indiainfoline.com/knowledge-center/trading-account/how-start-delivery-trading.
  8. “Day Trading Tips For Beginners”. The Balance, 2022, https://www.thebalance.com/day-trading-tips-for-beginners-on-getting-started-4047240. Accessed 20 Apr 2022.
  9. “Stop-Loss Order”. Corporate Finance Institute, 2022, https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/stop-loss-order/. Accessed 20 Apr 2022.
  • vantage academy open account

    Open Trading Account

    Discover the endless trading possibilities with our cutting-edge platform, designed to empower both beginners and seasoned traders alike.

  • vantage academy app

    Download Vantage App

    Trade on the go with the Vantage All-In-One Trading App, where smooth execution and market access come together in the palm of your hand.

  • vantage academy start trading

    Start Trading

    Are you an existing user? Login to your account to start trading 1,000+ products including forex, indices, gold, shares and more.